Exhibit 4-1 -If the Price of the Good Described in Exhibit 4-1

question 167

Multiple Choice

Exhibit 4-1

-If the price of the good described in Exhibit 4-1 is $1.40, then there is a

• A)shortage of 30 units
• B)surplus of 30 units
• C)shortage of 20 units
• D)surplus of 20 units
• E)surplus of 10 units

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Definitions:

Firm Completion

A commitment to finish a project or deliver a product by a specified date.

Asymmetric Information

Assumes managers have more complete information than investors about a firm’s prospects—can have an important effect on capital structure.

Diversified Portfolios

Investment strategies involving the mixing of various asset classes and securities to reduce risk through diversification.

Financial Distress

A scenario in which a business is unable to fulfill or struggles to pay its debts to those it owes money to.